|
The implementation of Solvency II, the capital adequacy directive for the European Union’s insurance companies moves forward, albeit slowly. UK parliament has launched an investigation into the benefits and costs of this directive.
Solvency II has the objective of consolidating all the current 13 sets of European insurance regulation, as well as improving the market by deepening the single market for insurance and reinsurance, enhancing policyholder protection, improving the international competitiveness of EU insurers and reinsurers, and improving overall insurance and reinsurance regulation.
Sub-Committee A of the UK Parliament’s House of Lords (upper house) European Union Committee, under the Chairmanship of Baroness Cohen of Pimlico, has decided to draw wider attention to the benefits and costs of this piece of legislation by producing a formal report. Evidence will be heard from the Association of British Insurers, on the 20th November. Other organisations wishing to submit evidence should contact the Sub-Committee Clerk for advice. The deadline for submissions is Tuesday 27 November 2007.
In a report in Accountancy Age, it was announced that the House of Commons (lower house) European Scrutiny Committee, a separate body, believe that complying with the proposals could cost the UK life and non-life insurance industry around £500m. This is on the basis that the UK industry's costs will follow its one quarter share of the EU market. It says that a more detailed estimate will not be available until the QIS (Quantitative Impact Study) is completed later this year. The committee also says that Solvency II is broadly similar to the UK's current regime, and that moving to a single regime will reduce the risk that UK insurers will face a higher regulatory burden than local insurers when operating in other member states.
| 
